Amazon Pantry to push FMCG products

Amazon Pantry allows shoppers to buy grocery and household items by filling up a virtual box of up to 15kg. This enables the etailer to push more products in bulk aimed at monthly or bi-monthly purchases.Digbijay Mishra | TNN | December 20, 2016, 08:30 IST

Bengaluru: Amazon is looking to position its platform Pantry as its frontline offering to drive FMCG and daily consumables sales, a top selling category for the e-tailer during the annual festive sales. Amazon Pantry, which started as a pilot in Hyderabad at the end of July, has quickly been expanded into seven cities. This move from the company comes on the back of the e-commerce major launching Amazon Now, its express delivery platform for FMCG products earlier this year.

Amazon Pantry allows shoppers to buy grocery and household items by filling up a virtual box of up to 15kg. This enables the etailer to push more products in bulk aimed at monthly or bi-monthly purchases. Unlike in the US where Pantry is available to Prime subscribers only, in India the service is available to non-Prime members as well for a Rs 20 delivery charge.

The increased focus on Pantry also puts Amazon in direct competition with traditional retail chains like Big Bazaar. “We have been very clear that we want to sell everything that consumers want. We have programmes like subscribe and save, which automatically deliver products at certain intervals chosen by consumers This is a key segment for us and we have witnessed 184% growth this year compared to last year,” said Saurabh Srivastava, director, category management, consumables, Amazon India.

When asked about rationale for faster expansion of Pantry compared to Amazon Now, he said the need for express delivery is more metro-centric while bulk purchasing is needed across the country. Amazon gets about half of its orders for FMCG business from beyond tier I cities.

For Amazon Now, the company announced it has expanded service to Delhi and Mumbai taking the total tally to four cities since it was launched in Bengaluru in February this year. Pantry is available in Bengaluru, Delhi-Gurgaon, Mumbai, Mysuru, Faridabad, and Pune. The development comes at a time when the Seattle-based company's local arm is pushing its FMCG business aggressively to increase consumer stickiness on its platform and make sure users are purchasing from the company round the year frequently. FMCG products typically register higher number of units sold due to lower average selling price compared to segments such as mobiles, electronics, large appliances among others.

"We have seen multiple times growth in sub -ategories of this segments such as household, baby products, personal care. It also gives us the buying pattern of users who are shopping for these products," Srivastava said. Companies such as Big Basket, Grofers are direct competitors in the online space for Amazon India in the FMCG space while rival e-commerce players have also started testing selling various daily essentials on their platforms.

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The move is expected to give Domino's an edge over rival pizza brands and QSR chains, but some experts warned that it may prove to be a tough promise to live up to and raised concern that it would put unnecessary pressure on delivery boys.